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"Dubai (DFMGI) shares rose, led by Arabtec Holding Co. and National Central Cooling Co., as investors bet that four days of declines were overdone.

The DFM General Index climbed 3.7 percent to 4,836.86 at the close in the emirate, ending a rout that wiped 8.5 percent from shares this week through yesterday. The index is the world’s best so far today among more than 90 tracked globally by Bloomberg. Arabtec, the United Arab Emirates’ biggest publicly traded construction company, and National Central Cooling, also known as Tabreed, both gained 11 percent.

Dubai shares slumped earlier this week, led by property and construction stocks, after the United Arab Emirates’ central bank said the property market may be overheating. Shares of Arabtec fell 30 percent in the first four trading days this week as its second-biggest shareholder cut its stake and amid rumors the company would leave the bourse."

"Arabtec Holding Co. (ARTC) rose, breaking a four-day losing streak, after the United Arab Emirates’ biggest publicly traded construction company said it hasn’t asked to leave the Dubai bourse.

The shares rose 11 percent, the most in a month, to 5 dirhams at the close. The stock earlier declined as much as 4.2 percent. Arabtec has never discussed taking its shares off the market with the regulator, the company said in an e-mailed statement today. Investor speculation it would remove its shares helped spur a 30 percent decline this week through yesterday.

“The concerns over Arabtec delisting were addressed today by the management, which improved the sentiment and removed potential concerns for investors,” Tariq Qaqish, who oversees the equivalent of $136 million as the head of asset management at Dubai-based Al Mal Capital PSC, said by phone."

The securities, due 2024, will pay annual interest of 1.75 percent and be converted at a price of $27.1396 a share, a 37.5 percent premium to its average share price today, the Dubai-based company said in a statement distributed via the Regulatory News Service. DP World’s shares dropped 1.3 percent to close at $19.75 on Nasdaq Dubai, paring gains this year to 12 percent.

DP World is “picking the best time” for the issue and its cash position will “look great” with these terms, Ahmed Shehada, head of advisory at National Bank of Abu Dhabi Securities LLC, said in an e-mail today. “If the market does correct, as has been speculated, then it will not be squeezed.”"

"Etihad Airways plans to buy a 49 per cent stake in Alitalia, its president and CEO James Hogan told US business leaders at a lunch in Los Angeles on Wednesday.

Addressing guests at the Beverly Wilshere hotel, Hogan outlined the investment stakes Etihad has in Air Serbia, Air Seychelles, Air Berlin, Jet Airways, Virgin Australia and Aer Lingus – and then referred to Alitalia.

“Currently we are in negotiations to acquire Alitalia, 49 per cent of Alitalia,” he said. It is believed to be the first time the size of the stake has been stated publicly.

His remarks came even as Italian Transport Minister Maurizio Lupi revealed on Wednesday that Etihad is prepared to invest up to 1.25 billion euros ($1.7 billion) in Alitalia over the next four years. While 560 million euros would be used to buy new shares in the airline, the rest would be invested in planes, design and training, he told reporters in Rome."

"Europe’s natural gas traders are betting the risk of supply cuts hasn’t increased after Ukraine rejected a Russian price proposal as the European Union says an agreement can be reached in the next few days.

The premium of winter gas to the day-ahead contract in the U.K., Europe’s biggest market, declined 8.2 percent yesterday, according to broker data compiled by Bloomberg. That signals traders aren’t more concerned about supply in the colder six months from October. Ukraine rejected Russia’s offer to sell gas for about 20 percent below the current price, saying the discount could still be canceled in future.

The EU, which relies on Russian gas shipped through Ukraine for 15 percent of its needs, is trying to broker a deal to solve the price dispute and avoid disruptions as in 2006 and 2009. Russia extended a deadline for Ukraine to make payments for previous gas deliveries to June 16, state-controlled exporter OAO Gazprom said yesterday. The International Monetary Fund gave Ukraine a $17 billion aid package last month, which it says can be used to pay for gas debt."

"The Turkish Lira has weakened against the U.S. dollar and stocks opened the day with losses due to heightened concerns over the turmoil in neighboring Iraq.

The lira/dollar ratio climbed over 2.12 in the morning as investors fear the geopolitical risks in Iraq may have knock-on effects in Turkey.

Forty-nine Turkish citizens, including Consul General Öztürk Yılmaz, were taken hostage by militants of the Islamic State in Iraq and the Levant (ISIL) in the northern Iraqi city of Mosul on June 11.

The Istanbul Stock Exchange also had a weak start to June 12, after plummeting by around 3.3 percent following reports of seizure of hostages the previous afternoon. The BIST-100 index opened with losses over 1 percent, before rising slightly.
"

"When stock markets in Dubai and elsewhere in the Middle East region nosedived in the wake of the global financial crisis, there was the inevitable exodus of asset managers and brokers from the region. Now, as local equity markets are on an upward swing, several international finance firms are ready to pounce again.

Japan’s Nomura Asset Management this week launched an office in Dubai, its first in the Middle East and is signaling it’s considering takeovers to expand.

Lazard Asset Management earlier this year hired an entire team from ING Group, while both Goldman Sachs GS and Russia’s Renaissance Capital added to their equity staff."

"
A big hike in oil prices is the last thing the global economy needs this summer as it battles major headwinds from a Chinese property bust to a contraction in Q1 US GDP. But the takeover of Mosul, the second largest city in Iraq by an Al Qaeda splinter group is a major blow to Middle East security.

While oil prices may not hit $140 a barrel, instability in Iraq will definitely set prices on an uptrend, says Nariman Behravesh, Chief Economist at IHS. If this is not a sell signal for stocks what is?"

"Russia has few simple relationships in the Middle East — or in other regions — but its relations with Qatar are especially complex.

The tension between Moscow and Doha over Syria is perhaps the most visible aspect of their relationship. Russia remains committed to Syrian President Bashar al-Assad, while Qatar is among the most assertive advocates of his ouster. This conflict reflects underlying differences in their attitudes toward Sunni Islamist ideologies — first concretely manifested during Russia’s wars in Chechnya, when Chechen separatists sought and found financial support in Qatar. As senior Russian officials routinely cited these conflicts and the terrorism they produced as their country’s top national security threat, this could have become a defining issue in their relations. Russian President Vladimir Putin’s eventual pacification of Chechnya, which he subcontracted to the brutal and corrupt Chechen President Ramzan Kadyrov, may have prevented this by sharply reducing the day-to-day violence.

Nevertheless, the two are rivals in important respects, as curious as this may seem given that Russia’s land area is over 1,400 times larger than Qatar’s and its population is nearly 70 times larger. The reason for this is of course natural gas, as Russia and Qatar are among the world’s leading producers and exporters. Accordingly, they cooperate in some respects, particularly in defending their shared interests, while competing in others. But unlike issues of national security and terrorism, the gas trade is just business. And so far, both Moscow and Doha have been prepared to take the view that business is business."

"Standard Chartered sees a “stable credit outlook” on Qatar, which the bank said is a reflection of the country’s dominant position in the global liquid natural gas (LNG) market.

Buoyed by a strong hydrocarbon sector, Qatar has built up significant external and fiscal cushions, Standard Chartered said in a report.

“While gas-market dynamics are changing, we do not foresee an immediate threat to Qatar’s strong credit metrics, particularly given its very low cost of production. After an era of LNG-led double-digit growth, Qatar is entering a more moderate growth phase that will likely be driven by the non-hydrocarbon sector as it prepares to host the 2022 World Cup,” Standard Chartered said."

"News from GCC countries was mostly upbeat last month. Qatar and the UAE were promoted by MSCI to emerging-market status. Qatar also decided to raise the ceiling on foreign ownership of Qatari companies, while Dubai liberalised rules for equity listings.

Economic indicators for the UAE remained very strong, with the purchasing managers’ index (PMI) rising from 57 in April to 58.3 last month, the highest level recorded in the country. Saudi Arabia also recorded some of the highest PMI readings in the world.

In keeping with large-scale infrastructure spending in other areas, a multibillion-dollar programme of spending on education was announced in Saudi Arabia."

"The chorus of fund managers warning that Arabian Gulf stocks are getting too hot has just grown one notch louder. The asset management arm of Nomura Group, best known for being Japan’s biggest securities brokerage, has joined the increasing number of well-informed voices expressing concern that equity valuations in the region are exceeding prospects for corporate profit growth.

Tarek Fadlallah, the head of Nomura Asset Management’s Middle East operations in Dubai, said that regional stock prices, particularly in the UAE, have been boosted too much by an ample amount of cash in circulation as well as ease of access to cheap financing. The situation, he said, was reminiscent of behaviour before the previous crash in 2008.

“Alas, the spectre of a stock market driven increasingly by liquidity rather than reasonable valuations raises uncomfortable parallels with the risk-taking activity across the region a few years ago,” Mr Fadlallah said. “Then, just as now, investors complained about the lack of alternatives to stocks and real estate and found themselves increasingly drawn into speculative trading.”"

"Increased interest in Islamic banking and rising investment in banking technologies will be key trends in the UAE’s banking industry this year according to the annual report of UAE Banks Federation (UBF)

“Islamic trade finance could provide new opportunities and become the preferred choice for emerging rapid growth markets (RGMs). Technology has been identified as a key sector for investment by the UAE government as part of its diversification and development strategy, and it is driving much change in the banking sector,” the report stated.

According to market research 76 per cent of bank customers in the UAE registered for online banking between December 2012 and May 2013, while 72 per cent used credit cards and 32 per cent used Islamic banking validating these two trends in the industry."

"OPEC, which supplies about 40 percent of the world’s crude, kept its production target unchanged in a widely anticipated move that left the group’s output below forecast demand for the rest of the year.

The Organization of Petroleum Exporting Countries reaffirmed yesterday its production ceiling of 30 million barrels a day for a fifth consecutive meeting. The group forecasts demand for its crude of 30.4 million barrels a day in the coming six months, while its 12 members produced 29.6 million barrels a day in April, the organization’s data show.

OPEC ministers said at a meeting in Vienna that they were at ease with supply and demand in global oil markets. While the formal limit remains unchanged, the burden will fall to Saudi Arabia to increase output to meet higher demand in the second half as political turmoil constrains Libyan output and sanctions curb Iranian exports, according to Barclays Plc, Societe Generale SA and Energy Aspects Ltd."